It helped Chancellor Helmut Kohl win reelection in Germany. It helped an Austrian car dealer sell cars. And it's helped community banks in about 20 states duke it out on television with their big-bank neighbors.
It is nothing more magical than a syndicated television commercial starring a goofy, head-slapping orangutan. And it's one of hundreds of used television commercials being resold to community banks across the country.
Seeking to save money on high-priced advertising costs, community banks are increasingly turning to commercial syndication, taking tried-and-true advertising campaigns from banks in one part of the country and applying them in their own little world.
Through intermediaries such as Adexchange in San Francisco and Advantedge in New York, small banks can purchase these used campaigns for only 5% to 10% of the original production cost.
With production costs often running between $30,000 and $100,000 for these successful commercials, paying only $2,500 to $7,000 for used ads provides the smaller institutions with "those same values without spending that kind of dollars," said Paul M. Cicerone, vice president for sales for Adexchange.
Community bankers "can't really afford (to produce an ad), but you don't want to look like someone took a video camera to the street corner," said Susan K. Kolling, senior vice president of $500 million-asset HMN Financial Inc., of Spring Valley, Minn., which paid a flat rate of $18,000 in 1994 for six ads from Adexchange's library. "It allows you to have the expertise without paying the price."
The commercial syndication also benefits the producing companies, which reap royalties of 15% to 40% from sales, depending on the production costs. That helps the selling companies to quickly recoup part of their original costs if the campaigns are strong sellers.
Typical annual royalties range from $5,000 to $8,000, Mr. Cicerone said, and Adexchange will give higher royalties if company officials expect an ad to perform well. However, about 30% of the ads never sell, Mr. Cicerone said.
One of the most popular and most successful ads, Mr. Cicerone said, is the orangutan ad, produced several years ago by South Carolina Federal Savings and Loan Association in Columbia before Charlotte-based First Union Corp. bought the thrift.
In the ad, a background voice asks an orangutan, "How does your bank react when you ask for a home equity loan?" The furry animal covers its mouth and yawns widely. When the voice asks about a line of credit, the orangutan sticks its tongue out.
The voice continues with, "Won't even listen, huh?" as the animal puts both hands over its head and then slaps its hairy hand across its face as the voice finishes with, "Must drive you clean out of your tree."
South Carolina Federal and First Union have marketed the ad in about 20 states, while Adexchange, which can only market it abroad, has sold it in about eight countries, including Israel and Spain. And the ad has been used several times in nonbank situations, with the dialogue changed, as in Mr. Kohl's campaign.
The two banks have earned $70,000 to $75,000 in royalties from the commercial, Mr. Cicerone said.
As bankers of all sizes have become more aware of the benefits of both sides, Adexchange and Advantedge have seen their client base - and their ad libraries - surge.
Currently, Adexchange, which started serving banks soon after it opened in 1986, has about 300 customers and 400 bank commercials, out of a total library of about 1,500 ads. Advantedge, which started serving banks just four months ago, has about 25 commercials and an equal number of customers.
Unlike traditional ad syndicators, Mr. Cicerone pointed out, Adexchange and Advantedge don't produce their own ads. Company representatives contact banks of all sizes, either through direct-mail advertising or telemarketing, to solicit their advertising campaigns, pitching the royalties as a selling point if the commercials are deemed valuable.
Salespeople also call potential buyers, questioning them about their marketing strategies and philosophies and then compiling and sending a collection of possible ads on a videotape. The buyers can then adapt the commercials to their own campaigns and needs either through the company or locally.
Jack D. Jacobs, president of Delta Consulting in Austin, Tex., who represents several banks around the country, said Adexchange and similar companies offer a "tremendous" service to community banks if the institutions can buy cheap cable time and can find an ad that fits their marketing philosophy and isn't too sophisticated for their market.
"They provide a tool of inestimable value," Mr. Jacobs said. "They allow small institutions to present themselves in the marketplace on a fairly equal footing with the larger players."
